Bankers are bracing themselves for potential changes under the incoming Trump administration, expecting it to limit the U.S. Consumer Financial Protection Bureau's (CFPB) power.
However, they hold out hopes that some of the watchdog's authority might be preserved due to Trump's populist tendencies.
Republicans had particularly targeted the CFPB for Director Rohit Chopra's bold actions to regulate banks, large tech firms, and other financial institutions-- which, under his tenure, faced punishments beyond the organization's legal jurisdiction, Reuters reported.
Critics have mixed reactions to Chopra's dictatorial measures and are expecting a potential rollback of Chopra's rules, such as caps on credit card late fees, medical debt collection restrictions, and consumer protections for buy-now, pay-later products.
Rohit Chopra's use of enforcement actions, informal guidance, and other non-traditional methods to shape policies outside the formal rule-writing process is expected to end.
"It's almost unquestionable that the bureau will be retracting most of the non-rule guidance it has issued under Chopra," said John Wells, a partner at WilmerHale who previously served as deputy enforcement director at the CFPB.
Meanwhile, the CFPB is warning states to make their data privacy laws stronger. Current regulations have gaps that expose customers to risk, and financial firms profit from consumer data.
Even though federal rules already encompass some consumer financial data, financial organizations are excluded from many state regulations. The CFPB calls on states to remedy these gaps and strengthen safeguards for sensitive customer data.
Chopra is likely to leave his position before January when President-elect Trump takes office or be removed shortly after, per Reuters.
"There are moments, like the credit card interest cap, where...that might be when real questions arise as to whether states like West Virginia actually step up and go so far as to file a suit" to block it, said West Virginia Solicitor General Michael Williams.
Republicans and the banking industry have also called for additional actions such as giving Congress more authority over funding or changing the agency's leadership structure. However, these changes are difficult to achieve because they need congressional approval.
